The Court of Appeals for the Federal Circuit (CAFC) recently issued a precedential unanimous opinion in High Point Design LLC et al. v. Buyers Direct, Inc. reversing in part, vacating in part, and remanding the district court’s decision in relation to design patent D598,183 (“the ‘183 patent”).

The case primarily addressed the validity of design patents in terms of obviousness and functionality, and also considered the sufficiency of pleadings of trade dress infringement.  In its discussion, the CAFC clarified the proper standards for determining the obviousness and functionality of design patents.   By way of disclosure, Buyers Direct, Inc. (“BDI”) was represented on appeal by Andrew M. Ollis, Frank J. West, and Philippe J.C. Signore of Oblon Spivak.

The ‘183 patent claims an “ornamental design for a slipper,” as shown in the drawing below:

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The ‘183 patent has been commercialized in the snoozies!® footcovering, shown here:

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After BDI sent a cease and desist letter to High Point Design LLC (“High Point”), High Point filed suit for declaratory judgment that the ‘183 patent was invalid and/or unenforceable and not infringed.  In its answer, BDI filed counterclaims of infringement of the ‘183 patent and trade dress infringement.

Four days after the deadline to amend pleadings had passed, High Point filed a combined motion seeking summary judgment of invalidity and non-infringement of the ‘183 patent and judgment on the pleadings in regard to the trade dress infringement counterclaims.  In BDI’s opposition, it included an expert declaration from a designer opining that the ‘183 patent was valid, and included proposed amended pleadings supplementing the trade dress infringement counterclaim.

The district court granted the motion for summary judgment, finding that the ‘183 patent was invalid as (1) obvious in light of the prior art and (2) primarily functional rather than primarily ornamental.  The district court also dismissed the trade dress infringement counterclaims with prejudice.

Obviousness

The CAFC reversed the grant of summary judgment of obviousness and remanded the case to the district court.  The CAFC explained the test for determining obviousness of design patents, clarifying that potential obviousness must be evaluated from the point of view of an ordinary designer, not an ordinary observer as the district court had done.  As such, the expert declaration submitted by BDI should have been considered.

Additional errors made by the district court were also noted by the CAFC for correction on remand.  First, the CAFC held that the district court failed to discern the correct visual impression of the patented design and, instead, simply described the general concept by using “too high a level of abstraction” and “failing to focus on the distinctive visual appearances of the reference and the claimed design.” Second, the CAFC held that the judge did not communicate her reasoning behind the selection of a primary reference, and the CAFC suggested that a side-by-side comparison is necessary.  Last, the CAFC stated that the district court did not consider BDI’s evidence of secondary considerations, but this evidence must always be considered when determining obviousness.

Functionality

The CAFC also reversed the grant of summary judgment of functionality and remanded the case to the district court for reconsideration.  The panel cautioned that the function of the article must not be confused with the functionality of the design, and held that the district court used the wrong standard in evaluating functionality.  The correct standard is to assess whether “the claimed design is 'primarily functional' or 'primarily ornamental,' i.e., whether the claimed design is ‘dictated by’ the utilitarian purpose of the article,” not to determine whether “the design’s primary features can perform functions.”

Trade Dress

Since the deadline for amending pleadings was over, the CAFC noted that the standard in evaluating a request to amend pleadings is “good cause” under Rule 16(b).  Since the district court did not explain whether this standard was used, and, if so, failed to explain why good cause did not exist, the dismissal was vacated and the case remanded.  The CAFC noted factors to be considered, including the moving party’s diligence, whether amendment will prejudice the defendants, and notice.